July 30, 2008

Recalling Eric Varley

Lord Varley, former Energy Secretary and Industry Secretary in the Wilson and Callaghan Governments, died yesterday. The Guardian carries an interesting obituary by Geoffrey Goodman. I half-agree with Goodman's assessment:

It would be grossly unfair to describe Eric Varley, who has died aged 75 of cancer, as a premature Blairite: yet that is how some of his few surviving ministerial colleagues from the Wilson-Callaghan era might well perceive him as they reflect back across more than 30 years. Unfair perhaps, but, alas, unfairness is a timeless professional hazard of all political life.

To describe someone as a premature Blairite is, in my opinion but clearly not in Goodman's, the highest praise you could give to a politician. But I can think of literally none to whom it would apply. Blair is a politician sui generis; there is no one else like him in Labour's history. Varley was a capable minister within the constraints that he faced. But to recall the decisions and debates in which Varley was involved is to recall a different age in economic management.

As Goodman recalls, Varley swapped jobs in 1975 with Tony Benn, whose move to become Energy Secretary was widely and rightly interpreted as demotion. (The opportunity for his demotion by Harold Wilson, if not the proximate cause of it, was the Yes vote in the European referendum. Benn had been a leading campaigner on the No side, as well as a significant liability for it.) Benn was at this time forming what came to be known as the Alternative Economic Strategy - a programme for a command economy involving greater industrial investment, import controls and compulsory planning "agreements" with large companies.

Labour did not take that route, but an immense amount of money and time was wasted on schemes that were scarcely more credible. Varley did his best to limit the damage, though not always for the right reasons. Goodman puts the background succinctly:

Then as Varley was moving from energy to industry, less than a year before Wilson resigned and Callaghan took over in April 1976, the American-owned Chrysler motor company tossed a massive bombshell at the UK car industry and the government: Chrysler announced a plan to shut down their entire British operation, affecting plants employing some 25,000 jobs divided between Coventry and Linwood in Scotland. Wilson, supported by his cabinet colleague Harold Lever rapidly produced a £200m rescue plan, which Varley opposed in cabinet. He wanted to fight Chrysler's threat, which he saw as economic blackmail. But he was overruled, and had the task of steering the Wilson-Lever rescue scheme through parliament in the face of fierce Tory opposition, alongside Labour critics who wanted the government to take over the Chrysler UK operation in British Leyland-style. For Varley it was a no-win situation.

It was no win for the British economy either. Varley and Edmund Dell argued in Cabinet that it was madness to spend millions on rescuing Chrysler. The arguments that swayed Cabinet, however, were first that employment needed to be safeguarded by public funds; and secondly that Britain was at risk of "de-industrialisation". They were arguments entirely without merit, but they had a perverse political logic to them. Still more disreputable was the diplomatic pressure exerted by the Shah of Iran, and to which the Government acquiesced. Chrysler UK manufactured Hillman Hunter kits that were then assembled in Iran.

This was one of the craziest decisions taken by Labour in the 1970s. The Government spent £162 million to rescue Chrysler UK, and undertook to cover more than £70 million in losses over four years. In return, Chrysler agreed not to shut down its UK operations. It also undertook to take part in a planning "agreement" with the Government - a meaningless gesture that was ever after touted by the Bennites as an example of what industrial planning could achieve.

Varley was right to oppose this. But his principal reason for doing so was that Chrysler was a direct competitor of British Leyland, to which the Government was also committed. In that year, 1978, Varley was pouring public money into the company, in the form of a £450 million aid package to support its corporate restructuring.

The amount of public money that ought to have been committed to British Leyland and in guarantees to Chrysler, either directly or through the misnamed National Enterprise Board, was zero. The principle of the industrial strategy was misconceived. Government was unable to pick industrial winners. All it succeeded in doing was throwing away public money. Varley went part of the way to acknowledging this. He deserves credit as one of the better ministers in a government whose principal achievement was to repair some of the damage that it had earlier inflicted.

Incidentally, the BBC report of Lord Varley's death states: "Among the other Labour Party figures paying tribute was Tony Benn, who succeeded Lord Varley as Energy Secretary in 1975 and also took over from him as Chesterfield MP in 1984 after boundary changes meant Mr Benn lost his Bristol South East constituency."

This is strictly true but misses out information that is worth recalling. Benn's constituency of Bristol South-East was indeed abolished, but Benn then sought the candidature in Bristol South. He failed to secure this against Michael Cocks, the Chief Whip - who was one of the few clear successes of the 1974-79 Government. Benn became instead the candidate for Bristol East. In the 1983 general election he lost that seat; he also, of course, lost the seats of scores of other Labour MPs and then did his level best to compound the damage. No wonder Varley retired from politics the next year. Varley was a minor figure in Labour's pantheon, but an honourable one in difficult times.

Comments

It pains me to say this, but I'm afraid you've fallen for a bit of Benn nonsense even though you correctly remembered his foiled attempt to deselect Michael Cocks. The fact is that on the calculations in the 'BBC/ITN Notional General Election of 1979' (which estimated the result of the 1979 election on the boundaries which came in with the 1983 election), the 1979 Labour majority in Bristol East on 1983 boundaries was higher than the real majority Tony Benn got in Bristol South East on the old boundaries. In other words, the Boundary Commission gave him a slightly safer seat to fight but he still wanted to move.

It is a tribute to Harold Wilson's political skill that he managed to demote Tony Benn in such a way that prevented Benn from properly claiming victimization (because Varley had also opposed EC membership). Varley was a figure of the traditional trade unionist centre-right of the Labour Party, many of whom opposed EC membership for industrial reasons; this alone makes the 'premature Blairite' description slightly ludicrous. Perhaps Geoffrey Goodman was trying desperately to explain Varley in terms relevant to the contemporary political world to which Varley never belonged.

Incidentally Varley also detested Neil Kinnock with a rare passion, which was the main reason he left Parliament so suddenly in late 1983.